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Why the National Flood Insurance Program will be reauthorized

July 27, 2017

Jerry Hanweck

The National Flood Insurance Program is $25 billion in debt, according to USA Today, and the debate to reauthorize it before it expires on Sept. 30 is expected to be contentious.

But a George Mason University professor said the program will survive simply because “a lot of people rely upon it.”

“FEMA’s budget will be cut in some way,” said professor of finance Jerry Hanweck, who from 2000-07 was a Visiting Scholar in the Division of Insurance and Research of the Federal Deposit Insurance Corporation. “There are a lot of people in flood plains who can’t get private flood insurance, so I don’t see Congress [not reauthorizing] it. It will come back.”

What sparked the narrative that the program is in danger? Part of it is just perception, Hanweck said.

“Anything that says, ‘Oh, my goodness, here’s the horrible Trump administration, cutting this and this and this,’ that’s where I think it comes from,” he said. “It’s mostly the business of going after Trump.”

Even so, the last time the program was up for reauthorization, in 2011, it took 17 short-term extensions and four lapses before it was done, CBS News reported.

But with 22,000 communities participating in the program that covers 5.1 million properties worth $1.25 trillion, reauthorization seems inevitable, Hanweck said. Sen. Bob Menendez (D-N.J.) has introduced legislation that would extend the program for six years with reforms to address waste and mismanagement.

“It will survive,” Hanweck said of the National Flood Insurance Program. “A lot of people will get together, particularly in the House of Representatives, and say, ‘Hey, we really need this.’ ”

Jerry Hanweck can be reached at 703-993-1855 or

For more information, contact Damian Cristodero at 703-993-9118 or

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